The authors thank seminar audiences at the University of Adelaide, University of Melbourne, University of New South Wales, University of Sydney, and the University of Wollongong for helpful comments. The theoretical model presented in this paper builds upon and extends that presented in Branstetter, Fisman, Foley, and Saggi (2007). We thank Ray Fisman and Fritz Foley for their contributions to that earlier work and for useful comments on this research. All errors remain our own. Views expressed are those of the authors and do not necessarily reflect those of the Bureau of Economic Analysis or the National Bureau of Economic Research.